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On Tuesday, Morgan Stanley (NYSE:MS) reaffirmed its Overweight rating and a $42.00 price target for Rocket Pharmaceuticals (NASDAQ:RCKT), in light of a serious adverse event (SAE) during a Phase 2 study of its gene therapy, RP-A501. According to InvestingPro data, analyst price targets currently range from $12 to $55, with a strong buy consensus rating of 1.39 (where 1 is a Strong Buy). Rocket Pharmaceuticals had voluntarily halted dosing in its Phase 2 trial for the treatment of Danon disease after an unexpected SAE led to a patient’s death due to complications related to capillary leak syndrome following an acute systemic infection. The company maintains a strong financial position with a current ratio of 9.19 and more cash than debt on its balance sheet.
The Food and Drug Administration (FDA) placed the trial on clinical hold on May 23, 2025. Rocket is collaborating with the FDA and an Independent (LON:IOG) Data Safety Monitoring Committee to investigate the SAE’s cause. The scrutiny is particularly on a new immune suppression agent introduced into the pre-treatment to counteract complement activation seen in some patients, unique to the AAV9-Danon program.
Due to the clinical hold, Rocket has stated it cannot provide a new timeline for the study’s results, which were initially expected in mid-2026. The company plans to host a conference call at 8:30 am ET to discuss these developments.
Despite the setback, Morgan Stanley’s analyst noted that the company’s shares are anticipated to face significant pressure in the wake of the patient death and the halted trial. The stock has already declined 71% over the past year and 56% in the last six months. According to InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. Discover 8 additional exclusive ProTips and comprehensive analysis in the Pro Research Report, available with an InvestingPro subscription. Rocket Pharmaceuticals has yet to determine the root cause of the SAE and is working diligently with regulatory bodies to resolve the issue.
In other recent news, Rocket Pharmaceuticals has reported a serious incident in its Phase 2 trial for the RP-A501 gene therapy aimed at treating Danon disease. A patient developed complications from capillary leak syndrome, leading to their death, prompting the company to halt the trial and the FDA to place it on hold for further evaluation. As of March 31, Rocket Pharmaceuticals held $318.2 million in cash, cash equivalents, and investments, and plans to extend its operational funding into 2027. Meanwhile, Rocket Pharmaceuticals announced promising preliminary results from a Phase 1 trial of another gene therapy, RP-A601, showing potential benefits for patients with plakophilin-2 related arrhythmogenic cardiomyopathy. The therapy was well-tolerated, with improvements in heart function and quality of life noted.
Cantor Fitzgerald has expressed confidence in Rocket Pharmaceuticals by maintaining an Overweight rating and raising the stock target to $30, following positive data from the RP-A601 trial. Despite some severe side effects in one patient, the results showed strong protein expression and clinical benefits, reducing the need for further dose escalation. Additionally, BMO Capital Markets continues to hold an Outperform rating for Rocket Pharmaceuticals, with a $50 price target, anticipating favorable updates on the Danon Disease program. The company is actively working with regulatory bodies to address safety concerns and advance its gene therapy pipeline.
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